Jonathan Reichantel_mixdown.mp3-from OneDrive Jonathan: [00:00:00] Most of the identifiers that associate a transaction with a person are just a series of letters and numbers, so it's not easy to trace back that Jonathan has sent Harpreet Sahota 1000 or 1000 bitcoin or something, but you can see all the transactions from the very, very beginning and you can export it. You could, you know, any number of data analytics products that you could run against it, just like any data store. One hundred percent, you can affect the data and get right to it, but you can obviously read and if you export it, you can do anything with it. Harpreet: [00:00:40] What's up, everybody, welcome to the artists Data Science Podcast, the only self-development podcast for Data scientists. You're going to learn from and be inspired by the people ideas and conversations that'll encourage creativity and innovation in yourself so that you can do the same for others. I also host open office hours you can register to attend by going to Bitly.com/adsoh forward slash a d s o h. I look forward to seeing you all there. Let's ride this beat out into another awesome episode, and don't forget to subscribe to the show and leave a five star review. Our guest today is a multiple award winning technology and business leader whose career has spanned both public and private sectors. He holds several degrees, including a PhD in information systems Harpreet: [00:01:44] And is currently the founder of advisory, Harpreet: [00:01:48] Investment and education firm Human Future, Harpreet: [00:01:52] As well as adjunct Harpreet: [00:01:53] Professor in the School of Management at the University of San Francisco. And he's also a regular [00:02:00] content creator of online video courses for LinkedIn Learning. He's a global thought leader on a number of emerging trends, including urban innovation, smart cities, sustainability, blockchain technology, Data Governance and the Fourth Industrial Revolution, as well as digital transformation. Harpreet: [00:02:20] Today, he's here Harpreet: [00:02:21] To talk to Harpreet: [00:02:21] Us about blockchain, Harpreet: [00:02:23] So please help me welcoming our guests today. The best Harpreet: [00:02:26] Selling author, professor, Harpreet: [00:02:28] Founder, writer and advisor, Dr. Jonathan Russia-NATO. Jonathan, thank you so much for taking time out of schedule to come on to the show today. I appreciate having you here. Jonathan: [00:02:39] Thanks. Harpreet: [00:02:40] Harp read that that guy Jonathan: [00:02:41] Sounds really interesting. Harpreet: [00:02:42] I'd like to meet him. Harpreet: [00:02:44] I thought the exact same thing when I went through your catalog of courses on LinkedIn, I was like, Man, this guy is super interesting. You got such a wide range of interest in your courses on LinkedIn are amazing, and I was Harpreet: [00:02:56] Immediately hooked with the Harpreet: [00:02:58] Blockchain courses and that was really, really was my introduction into really understanding the technology. So I'm super excited to have you here to discuss that further. But before we get into that, some blockchain thoughts, let's just learn a little bit more about you. Talk to us a bit about where you grew up and what it was like there. Jonathan: [00:03:15] Yeah, thanks. Harpreet, it's great to be with you. I was born in Ireland. No less. Yeah, I bet you weren't expecting that Harpreet: [00:03:24] As born in the Jonathan: [00:03:25] Big city of Dublin city in Ireland and I had an amazing childhood there and youth and in my twenties I Harpreet: [00:03:34] Moved to the U.S. Jonathan: [00:03:35] I got a green card and I've been here now just over twenty five years and technology guy all the way. You know, technology been my career. My son has been music. I've been a musician and that's maybe we'll keep that for Harpreet: [00:03:52] Another podcast for Jonathan: [00:03:53] Another day. But in Ireland, you know, at the school to learn about engineering [00:04:00] and technology. Then I worked with my brother, actually, we we had a tech company together, but then in the U.S., I worked for a big firm and again, I guess in technology, and I spent actually 15 almost 15 years with the time it was known as PricewaterhouseCoopers. Today it's. Harpreet: [00:04:20] And my last Jonathan: [00:04:22] Job there was really cool. Harpreet: [00:04:23] I became the Jonathan: [00:04:25] Director of technology innovation. That's like a hobby. You know, that's you're getting paid for doing your hobby. And I was I was like, you know, when that happened, I said to myself, This is what I want to do for the rest of my life. I want to do something that feels like a hobby and I can make a living from it. And then I went to work for O'Reilly Media over on the west coast of the U.S., working in Tim O'Reilly's team. Pretty neat, guy. And then then I had this sort of kind of happened by accident, but it was one of those really good accidents and that I was invited to be the CIO for City. And when I say it was an accident, what I mean really by that is it was a surprise, right? It came from, you know, nowhere the invitation. Harpreet: [00:05:14] And I said, Well, Jonathan: [00:05:17] Let's see maybe what I can do. I I wasn't Harpreet: [00:05:19] Necessarily looking to work Jonathan: [00:05:21] In government or do public service, but the opportunity to work for the city of Palo Alto, which is sometimes referred to as the birthplace of Silicon Valley, was too interesting not to try. And you know, as the city manager said after I took the position, he said, You know, we we took a bet on you and you took a bet on us. And you know, I spent seven years there and you know, I have a lot of good stories to tell, and Harpreet: [00:05:49] I actually Jonathan: [00:05:50] Through that gained a love of cities. And that's what I do now. You know, that's my own firm. I'm helping cities and really bringing technology to bear [00:06:00] on. How can we reinvent how you deliver the urban experience? And I've been lucky enough to write the book on it, you know, smart cities for dummies, as you alluded to in your intro, and it's a bestseller. So that's a little bit about me, my background. Harpreet: [00:06:14] That's so cool, man. You have such an interesting and varied career, man. How did this love of technology kick off? How did you get interested in it? Jonathan: [00:06:24] It goes back to two things. One is my brother was the tech guy at home, brought a computer home. You know, he's my older brother. I stood behind him as he was programing and playing games and, you know, kind of saw what he was doing and try to emulate the code that he wrote. And then when I wrote, you know, some very basic software as a as a child, I mean, really probably in, you know, starting maybe eight or nine years old. My father was very impressed. You know, so that was another driver. It's like, Oh, look, I can do stuff that gets my father's attention and he likes. And so that combination of both, Harpreet: [00:07:05] You know, my brother being a role model Jonathan: [00:07:07] And my dad appreciating the work all lent itself towards something that, you know, drove me to want to learn more and do it more. And it stayed with me ever since. I think, you know, when I was about. I never know the exact age, but it was Harpreet: [00:07:21] Definitely sort of Jonathan: [00:07:23] Somewhere between 11 and 13, and I was Harpreet: [00:07:26] Getting quite good at programing Jonathan: [00:07:28] Some basic stuff on a Commodore 64, and my brother's friend asked me if I'd write a game that he would buy from me and sell it through his company. And I thought, That's interesting, and I got like the equivalent of maybe two hundred dollars, something like that. And I thought, Wow, you can. You could do this and get paid for it. So, you know, I was I was hooked at that point. If I kind of think about my career since then and my interests, I have recognized and do recognize that technology now Harpreet: [00:07:59] Is [00:08:00] a has a central role Jonathan: [00:08:01] In all of our lives more than perhaps I even thought it ever would have, you know, having grown up through the seventies, eighties, nineties and now into the 21st century. And you know, with the with the emergence of the internet, all everything changed, of course, and it's changed the world change. Our lives changed how we work. And so I've always appreciated the value technology has in the world. How it, you know, on balance, is a good thing. There's a lot of challenges, of course we know about them, but on balance, you know, transforming the world for a lot of humans in a positive way, whether it's opportunity or quality of life economics, that type of thing. And as I followed it and immerse myself in the in the industry of technology, I've done quite well and it's encouraged Harpreet: [00:08:48] Me and Jonathan: [00:08:49] My my passion and my interest has just grown ever since. Today, it couldn't be any greater because we live. Every business is a technology business and we live in this technological time, this fourth industrial revolution, where Harpreet: [00:09:01] Everything has a Jonathan: [00:09:02] Technology slant to it and there's no end in sight, you know, it's just it's just getting it's going to get our world. Is it going to become more automated and technology Harpreet: [00:09:12] Driven in the future Jonathan: [00:09:13] Than has ever been? Harpreet: [00:09:15] So let's talk about a new technology. Will new ish? I guess it's been around for since 2008, I guess, which 13 years in, but new to me and most likely need for a lot of my listeners as well. And this is blockchain technology. So talk to us about, you know, what is a blockchain and how is this different from what we're used to seeing in Data structures? Jonathan: [00:09:39] Well, I don't know. It's always interesting where to Harpreet: [00:09:42] Start the answer to this. Jonathan: [00:09:43] I should say the kind of iteration of the generation of blockchain technology that we're talking about today really sees its Harpreet: [00:09:50] Birth through bitcoin Jonathan: [00:09:52] Bitcoin in 2008. The idea of distributed ledgers or more broadly, the concept Harpreet: [00:09:58] Of blockchain predates that. [00:10:00] Jonathan: [00:10:00] But today, Harpreet: [00:10:02] When people say distributed Jonathan: [00:10:03] Ledger or blockchain, we all know what we're talking about. We're talking about the offshoot of bitcoin of cryptocurrency and and so to kind of get there to White's different, I'll just spend just a moment on its genesis, right? So there's a paper written in 2008, and it proposes a a new digital currency that allows for payments between Harpreet: [00:10:25] Individuals from basically Jonathan: [00:10:28] What's called peer to peer. No banking system, no brokers, no middle intermediaries. Just if I want to pay our premium, I can just pay you directly. And it's a very interesting, compelling, provocative idea that's been tried before and it was tried before 2008. But for a variety of reasons, it didn't work. One of the core challenges to digital money is this problem that's written about in paper call the double spend problem. And in a nutshell, double spend means when something is digital, it can be duplicated really easily. You know, you have a graphic file, a JPEG on your computer, and you just copy and paste and you have a second version of it, right? Think about that in a money sense. If I Harpreet: [00:11:19] Have the equivalent of ten dollars Jonathan: [00:11:21] And there's two people that I need to pay ten dollars if I can just copy the ten dollars, twice per year to pay the other person. Well, wouldn't that be great, right? It could. Could be. Could I have unlimited money just by copying and pasting? Well, look, you don't need data scientist or computer scientists to realize, well, that won't work. Basically, it becomes meaningless. You have to be able to send money digitally. And if I send you the equivalent of Harpreet: [00:11:50] $10 digitally, I no longer have it and you Jonathan: [00:11:53] Have it right. There has to be a mechanism to make that work. And this is the this is the secret sauce, the sweet spot. And so what [00:12:00] you have is this idea of a ledger. Write a ledger, something that you record transactions. Ledgers are seven thousand years old, by the way. You know, it's not. We didn't invent ledgers in two thousand Harpreet: [00:12:11] Eight, and Jonathan: [00:12:13] What we have is the distributed ledger. So we're talking about an electronic ledger, something to record transactions in. That is on lots of computers. In fact, it's on all the computers of all the participants who want to exchange Harpreet: [00:12:24] This digital currency. Jonathan: [00:12:26] And this, of course, this distributed ledger, it's a type of database. It records all the transactions and that database, that core storage of those transactions Harpreet: [00:12:38] Is what we Jonathan: [00:12:38] Know is blockchain. So that's what we're talking about, right? The underlying database. But the database works in a Harpreet: [00:12:44] Very unique way. Actually, it Jonathan: [00:12:46] Works in several ways. Number one, and this will, you know, if you're if you're a Data person, this is the first thing that will blow your mind. You never you can never delete transactions and you can never edit transactions. The only thing you can do with a blockchain database is add new transactions. Right? And so probably out of the scope of this conversation, there's a reason for that. I mean, number one is one positive is you have an entire audit trail of every single transaction and you can validate things that way. So in this distributed ledger, this database is these blockchain databases on everybody's computer. When a transaction takes place, when I send you money, you know that has to be recorded and there has to be a process, some unique magic that prohibits me from manipulating my total. So that's it's authentic and that magic is coded into how blockchain works. We may get to it. So I'll sort of kind of wrap up here. Harpreet: [00:13:48] You know, one Jonathan: [00:13:49] Thing that's really key when for the layperson to think about with this blockchain technology Harpreet: [00:13:55] That makes it different is Jonathan: [00:13:57] In society and in technology, we [00:14:00] rely very much on trusting other humans. Right? So, you know, when I when I go into a bank and I give cash to the bank, the banker that person puts into my account and I trust that it's happening and I trust the bank, right? Which is really just more people. You know, when we do business, when we buy something, we expect to get it delivered. There's this sort of human element. And of course, there are lots of criminals, people who are Harpreet: [00:14:29] Bad and they don't Jonathan: [00:14:30] Fulfill the trust. And, well, we have a legal system to deal with that. But generally, if you think of the millions and millions of transactions happening every day, it's because we trust humans. What blockchain says is, no, we don't trust humans. In fact, we don't want humans to be part of the trust mechanism. We in fact want to be trustless. We want it to be trustless and not that we don't trust it, but we want it to work without trust. In fact, what we want is a software code Harpreet: [00:14:56] To be the arbiter of trust. Jonathan: [00:14:59] And that's the big difference, you know, than than every other database that's come before it. Harpreet: [00:15:05] Thank you so much. There's a lot of great information that led to a lot to unpack. So first thing is like, you know, every time I hear about blockchain in the same sentence, almost they talk about cryptocurrency. So the exact same thing, or can we use them in place of each other? How does this work? Jonathan: [00:15:23] No, no. That's I'm glad you ask, because this comes up Harpreet: [00:15:26] A lot to go back to sort Jonathan: [00:15:27] Of my again, my explanation of blockchain was born out of bitcoin. So what we're trying to do back in Harpreet: [00:15:35] 2008 and then eventually Jonathan: [00:15:37] 2009 is Harpreet: [00:15:39] Create this Jonathan: [00:15:40] Digital currency that's called bitcoin and it succeeds Harpreet: [00:15:43] And it's writing Jonathan: [00:15:45] On top. It's an application that's writing on top of other technology. The other technology is called blockchain. Now what happens is there are turns out to be Harpreet: [00:15:55] That, you know, Jonathan: [00:15:56] Bitcoin is open source and there are other cryptocurrencies [00:16:00] that are created from it. There are other cryptocurrencies that are not based off of bitcoin that that happen, and the underlying technology is used the blockchain to power it. But there's a realization Hey, this this underlying technology that's powering crypto could actually do other stuff. Harpreet: [00:16:15] You know, it could carry other types Jonathan: [00:16:17] Of transactions, you know, maybe transactions to do with real estate, for example, closing, you know, all the paperwork on a new property when you buy one and there can be transactions, for example, that happened during the supply chain when products flow from a source to destination and creative smart people sort of started to figure out, Harpreet: [00:16:38] Hey, you know, Jonathan: [00:16:40] Let's try to use this underlying technology for other things. So blockchain becomes like the underlying operating system. Harpreet: [00:16:48] We'll just use that example here for a moment. Jonathan: [00:16:51] And on top of it, rides all these applications, all these different uses. One of the uses is cryptocurrency, but now we find there are hundreds, maybe thousands of other uses. So they really they're very different things now. The connection, of course, is that for the most part, well, currently we need blockchain to run bitcoin and to run Ethereum and Litecoin and Dogecoin and all the new ones, right? But we also. So now Harpreet: [00:17:19] Use a Jonathan: [00:17:21] Variety of different types of blockchain systems to run massive amount of different other applications. Harpreet: [00:17:28] And it's a interesting point, right? So for listeners, there's not just one blockchain blockchain like the most famous blockchain is the bitcoin blockchain, but right, blockchain itself is just a technology, Harpreet: [00:17:39] And there's several Harpreet: [00:17:40] Different kind of instantiation of Harpreet: [00:17:43] It, right? Harpreet: [00:17:43] And you mentioned that blockchain is, you know, we can kind of conceptualize it as if it was a database. So in blockchain, databases provide more data integrity compared to traditional databases because they can only ever write to them. We can't delete anything. We can't change anything, [00:18:00] right? Harpreet: [00:18:00] Mm hmm. Jonathan: [00:18:01] So that is one of the features, right? So I mean, straight away that that's a that's a positive thing that if you want to look at every single transaction that was ever in a blockchain database, you can write. So it has this terrific mechanism for auditing this characteristic Harpreet: [00:18:20] Of not Jonathan: [00:18:21] Deleting, but just adding is what we call blockchain immutability. We call it immutability, the weakness in traditional databases. And there are many. Although they run the world today, the traditional relational databases run most of society. They have issues. For example, they have an administrator, one or more administrators, and that person is a human being and they make mistakes. And they are sometimes criminal, you know, they add people or take away rights. So you have a lot of issues related to that. So the other feature course with the blockchain Harpreet: [00:18:57] Is that it doesn't rely on Jonathan: [00:18:58] Humans to do that. It relies on Harpreet: [00:19:01] Code and this sort of Jonathan: [00:19:03] Particular type of we'll call it just kind of it's I call it magic, but it's really mathematics. It's mathematics, and that is so unique to blockchains that it elevates the integrity or the security of every transaction in a way that traditional databases struggle. Because you can look, you can get traditional databases to be very, very, very secure. But there are failure points and there are weaknesses. You know, despite our best efforts because we're dealing with code and blockchain, you've got to try to overcome some very significant mathematical challenges that are just so hard they're a deterrent to fraud. Now that being said, there has been some attacks on blockchain, so let's let's be really clear about that. But it's been infrequent, rare. I mean, we've recovered well from it. Unlike, unfortunately, the cybersecurity events that we see in the world today that happen every day and they involve millions of people, you know, different [00:20:00] organizations, your bank, your supermarket, that type of thing. And those continue to happen. So there's vulnerabilities in both with a significant difference in the ability for each to protect the integrity of the data. Harpreet: [00:20:12] Yeah. Well, we'll talk a little bit about the mathematics stuff in a bit here because I know you Data scientists listening when want to get to that part. But but like if we conceptualize like blockchain as if it was a database, like does there exist like b SQL like blockchain query language or anything like that? Does that even make sense to think of it in that way? Jonathan: [00:20:31] I mean, you can Harpreet: [00:20:32] Use SQL against Jonathan: [00:20:33] The blockchain system. You know, one of the one of the things Harpreet: [00:20:36] That's neat about Jonathan: [00:20:38] The architecture of the technology is that it's it's open. Everybody can look at it. And now they most of the identifiers that associate a transaction with a person are just a series of letters and numbers. So they you can't it's not easy to trace back. You know that Jonathan has sent Harpreet a thousand dollars or 1000 bitcoin or something. But you can see all the Harpreet: [00:21:02] Transactions from the very, very beginning. And you know, you can export it. Jonathan: [00:21:05] You could, you know, any number of data analytics products that you could run against it, just like any data store. One hundred percent. Now you can't Harpreet: [00:21:14] Affect the data, you can't Jonathan: [00:21:15] Write to it, but you can obviously read and and if you export it, you can do anything with it. Harpreet: [00:21:21] So kind of thinking Harpreet: [00:21:22] About that, like, I'm Harpreet: [00:21:24] Just curious, what were your thoughts on here? Because I know you've done a course on data governance as well on LinkedIn serving up. You've got so many amazing courses on LinkedIn Learning. Yes, go, go. Check him out. I will link to his LinkedIn instructor page. Harpreet: [00:21:35] Like, what are the Harpreet: [00:21:36] Implications of blockchain technology for like data governance data management? Harpreet: [00:21:41] Have you thought about that at all or Harpreet: [00:21:42] Am I just like sounding crazy right now? Jonathan: [00:21:44] No, no, no. Great. Great thought. One of the things I think that every let's say Chief Technology Officer has to think Harpreet: [00:21:53] About is what Jonathan: [00:21:54] Is the platform they're going to build a solution in? And you know, I've been doing [00:22:00] tech for over 30 years and you've probably heard this. You typically don't create a solution looking for a problem. What you're doing most enterprise is you've got a problem and you're figuring out how am I going to solve it? And so you don't say we've got we've got a data related solution that we need to Harpreet: [00:22:16] Build to solve a Jonathan: [00:22:17] Problem. Let's try blockchain for fun, you know, that's not good. You know it leadership, what you say is what is the best tech and most of the time it's going to be an Oracle database or, you know, a SQL database Harpreet: [00:22:31] Or Microsoft Jonathan: [00:22:32] Or SAP solutions. I'm probably leaving. I don't want to leave anybody at other solutions, right? Harpreet: [00:22:37] Traditional databases, Jonathan: [00:22:40] But you might, as a CTO or the CTO team might say, you know, this problem Harpreet: [00:22:46] Is supply Jonathan: [00:22:47] Chain related. It involves a lot of disparate parties who, you know, we don't necessarily trust or have any mechanism of trust. Maybe we should try. Blockchain technology, you know, there's an enterprise version of blockchain called Hyperledger, right, that could be the one. There's also Ethereum, which can be used for quite, very sophisticated applications, you know, and so these get integrated into your Harpreet: [00:23:13] Environment and they they collect Jonathan: [00:23:14] And produce data. And one hundred percent, they fall underneath your data governance strategies and organization. It doesn't matter that one Data stores Oracle and one is Hyperledger. It's just Data. It's just Data being handled in a different way. So as data scientists, we very much need to be starting to think about bringing the blockchain ecosystem into our purview, you know, underneath our umbrella of systems that manage data, whether as an intermediary, as as as a producer, as a handler, you know, so I say, you know, if you're in data science and you're kind of curious about blockchain soon, that curiosity is going to move to, hey, it's going to be part of my responsibility, [00:24:00] you know, so I certainly think you've got to grow your expertize. And as an organization, you don't want the blockchain based systems to be an outlier. No, you want to have the same level of Harpreet: [00:24:13] Oversight and ownership Jonathan: [00:24:16] And security and all the things you'd have in a data governance program in order to leverage the value of that system and keep it secure. Harpreet: [00:24:22] And when we think about kind of the intersection between data science and blockchain technology, what's that Harpreet: [00:24:27] Look like like Harpreet: [00:24:28] Have you seen? Yeah, I guess the you know, from your experience, how have you seen machine learning data science intersect with blockchain? Or if you haven't seen it intersect with blockchain yet, how do you see it intersecting in the future? Jonathan: [00:24:42] Well, I think what you're seeing a lot is blockchain systems are becoming a part of a system, part of an ecosystem. You know, when you one of the industries where blockchain is thriving is in the financial services in fintech. Harpreet: [00:24:58] And, you know, in some places, Jonathan: [00:25:00] It's helping to optimize existing services in other areas, it's creating new opportunities. I wouldn't think of Harpreet: [00:25:08] A Hyperledger being a, Jonathan: [00:25:11] You know, enterprise based blockchain as a standalone system. You know, it's going to interface with with lots of other solutions. It's going to consume and produce Data. And there's going to be an opportunity for ML and AI to be applied, you know, as appropriate to your to your workflow. So it is important to recognize while blockchain is sort of the the hot thing right now or continues to be pretty hot. As sort of the Harpreet: [00:25:43] Excitement begins to Jonathan: [00:25:46] Wane over time, it becomes another tool Harpreet: [00:25:50] In your, you know, in your Jonathan: [00:25:51] Toolkit of solutions that you can use in your enterprise or use Harpreet: [00:25:56] When you're Jonathan: [00:25:57] Building your startup or perhaps as a consumer, [00:26:00] Harpreet: [00:26:00] You're you're getting Jonathan: [00:26:01] Involved in non-fungible tokens. Maybe you're you're selling digital art or photographs or something where you're a collector of digital things. So questions are it's absolutely appropriate. I think I think there is an inclination to think that this is its own standalone world and it doesn't Harpreet: [00:26:17] Coexist with all the other. Jonathan: [00:26:20] Aspects of contemporary Harpreet: [00:26:22] Technology, the the right Jonathan: [00:26:23] Answer is it's another part of our enterprise and that a part of our enterprise architecture, Harpreet: [00:26:31] Definitely. And I think it's, you know, it's our responsibility as adults in our careers to keep abreast of these new emerging technologies and learn about them and see how it could impact you or how it could influence the work that you do. And I know that's something you've been doing throughout your entire career. If your catalog of LinkedIn learning courses that you teach is any indication, like you're really, like really heavily involved in tech, and I admire that. Harpreet: [00:26:58] Going back to to blockchain, you talked about enterprise solutions. Harpreet: [00:27:02] We talked about Hyperledger. I think this might be a good time to talk about the difference between public, permissioned and private blockchains. So an example of the public blockchain is bitcoin, right? That's the public blockchain. Anybody can kind of download that and become part of that network. So what's permissioned and and private all about? Jonathan: [00:27:21] Yeah. Yeah, it's it's actually a fascinating topic. Because the original bitcoin use of blockchain, as you have pointed out in your question, for it to work, it has to be public. It has to allow anyone to participate. You can't have a digital monetary system if it's restrictive. I mean, you can, but I don't think could be very popular for everyone in the world to use bitcoin. The system has to be open and available for anybody to participate. You don't need to have any credentials. Basically, you don't need permission. Harpreet: [00:27:59] And that's what we mean by [00:28:00] permissionless, right? So when we say Jonathan: [00:28:02] Public and permissionless, we basically mean the system is entirely open to anybody. Anywhere to participate. And that's really healthy, I mean that. Well, it's a little bit like if you come came to the U.S., you should be able to get dollars and spend dollars, right? Harpreet: [00:28:22] So and then when Jonathan: [00:28:24] You when you start to have other applications that run on top of other blockchains like, let's say, a a gaming platform that runs on top of Ethereum, Ethereum being another Harpreet: [00:28:37] Blockchain, you want the system to Jonathan: [00:28:40] Be open to anyone who wants to participate in that gaming world. Now all of that that makes it wonderful also makes it challenging for an enterprise. Now think about an enterprise. It's really the the opposite of everything I just said it is. It is about limited access to systems. It's about permissions. It's about credentials. It's about, you know, I only want certain people to see Data or interact with my system, but I want the features potentially of blockchain. I want the immutability or I or I want the distributed nature, you know, the dark characteristics of blockchain that are valuable for my enterprise. But you know, Ethereum and bitcoin is just not going to do it because they're public. So a consortium of tech Harpreet: [00:29:29] Companies, sometimes Jonathan: [00:29:30] Just in the last 10 years, sort of said, Look, if this thing is going to be big in the enterprise and Harpreet: [00:29:36] Frankly, you know, if we Jonathan: [00:29:37] Want it to be a solution in the enterprise, we're going to have to come up with some way of having a permissioned blockchain and a private one for an enterprise to use. And so you get this idea of a private, permissioned blockchain. Now the reason why at the very beginning of my answer, I said, this is such a fascinating areas. In some ways, [00:30:00] the notion of a private, Harpreet: [00:30:03] Permissioned Jonathan: [00:30:04] Blockchain is sort of like. The opposite of the whole point. All right. You it's like we created something for a very specific reason because we wanted to move away from the very limitations of what we were, you know, of the tradition. And now we're kind of saying, well, we will actually create a version of it, you know, in the place in the world in which we have limitations. Now we kind Harpreet: [00:30:27] Of have pulled it off. In a way, Jonathan: [00:30:28] Hyperledger being the best example Harpreet: [00:30:30] Is open source, but it allows Jonathan: [00:30:34] For enterprises to decide who can join and be part of it for obvious reasons. And it's growing. I mean, you've got remarkable Hyperledger offers from Harpreet: [00:30:45] The likes of IBM, right, Jonathan: [00:30:46] And the likes of Dell and and others. So, you know, it's it's now a legitimate consumer sorry commercial enterprise solution, and they've had to be very Harpreet: [00:31:01] Creative in Jonathan: [00:31:03] Keeping the spirit of blockchain, but also limiting some of the features of it. Harpreet: [00:31:08] They're going back to that idea of trust. Something that comes across quite often whenever I'm researching or reading about blockchain is this idea of the Byzantine generals problem? Who in general and why are we still doing problems? Jonathan: [00:31:25] Yeah, like like hundreds of years later, this is still a problem. Yeah, that's right. Ok. So a little bit more complex. But let's see if we can, if I can actually articulate it. Harpreet: [00:31:39] So, yeah, Jonathan: [00:31:39] It is sort of interesting Harpreet: [00:31:41] That Byzantine Jonathan: [00:31:42] Generals problem. We're using the Byzantine, which is anywhere from the four hundreds to the thirteen hundreds. We're talking about Turkey and Greece and that that area. Harpreet: [00:31:51] And that is actually Jonathan: [00:31:53] Not so important what the Byzantine generals problem is in a sort of a storytelling [00:32:00] perspective. There's some armies, right? And we're like, this is a long time ago, so there's no cell phones. There's no email, right? No electricity. We're thousands of years Harpreet: [00:32:09] Ago, well, about about Jonathan: [00:32:11] A thousand years ago. We are we've got generals and they have armies and Harpreet: [00:32:17] They want to invade a town. Jonathan: [00:32:19] Right? And there's, you know, if they just invade the town themselves, they'll actually lose. But it turns out there's another army from another place that also wants to invade the same town. But they don't have a way really to communicate, especially when they're about to invade. But they know that if they join together, if the two separate armies join together, they can invade and actually win and succeed in this town. Now the problem is there's some distances involved and they again, the only way they can actually communicate is with messengers. So it's guys on thought Harpreet: [00:32:55] Right or on horses. And so Jonathan: [00:32:58] One general Harpreet: [00:32:59] Says, you know, Jonathan: [00:33:00] Everything looks good. We should attack tomorrow Harpreet: [00:33:03] At sunrise, you know, 6:00 Jonathan: [00:33:05] A.m. But the other general doesn't know that because he's like 50 miles away. So he gets one of his writers, one of his messengers, to jump on a horse and say, Will you tell the other general that we're going to invade at? Harpreet: [00:33:17] What did I say? Six, six a.m., Jonathan: [00:33:19] Six a.m. six a.m. Tell him and see if he's OK with that. So the rider runs off, goes and does this and comes back and says, Harpreet: [00:33:27] Yeah, he's good, they're good. And so you coordinate it. Jonathan: [00:33:29] Now the problem with this is a few problems. Number one is, how do you know the writer is telling the truth because the writer went off gone for a few hours comes back and says what? He says? Maybe he was bribed. Another problem is maybe the other general said yes, but then changes Harpreet: [00:33:46] His mind for whatever reason. Right? Jonathan: [00:33:48] Ok, so that's the idea is that how do you communicate? With integrity to different parties that you can't really you don't trust and you have difficulty connecting with, how do you ensure [00:34:00] that the decisions are good and everyone's on the same page? It's a metaphor for managing distributed systems. Right, and in a whole range of contexts and systems contexts, this is useful because you're you're actually trying to solve that problem computationally. Right. And let me say, as you can probably imagine, it's a hard problem to solve in a in a distributed computing environment. The relationship to Harpreet: [00:34:30] Blockchain is Jonathan: [00:34:32] That's what we're trying to do. We have technically hundreds of people that are connected. And we don't know anybody. Like when I go a bitcoin or a theory and whatever it is that I use, I don't know anyone else, right? And yet when a transaction is Harpreet: [00:34:49] Placed, we have to Jonathan: [00:34:51] Have a high degree of confidence that we all agree and it's a good transaction. It's not a fake one and it's a fraudulent. And so we need a solution in the blockchain environment to ensuring that. The decisions are correct and approved, right, and so we do have a solution, and that's what was written about in this paper, this Satoshi Nakamoto paper in 2008 and it's called proof of work, it's proof of work. That's the solution. And that, by the way, is the magic that I spoke about earlier. That's the mathematics that makes it all work. Harpreet: [00:35:27] Yeah, let's get into this, this mathematics, that kind of a high level here, but technical enough for data scientist to understand because there's always this mathematical puzzle that that that people talk about having to get solved when you add a block to a blockchain, like it's just like a really hard sudoku puzzle. Like, Whoa, whoa, what Jonathan: [00:35:43] Is all this about? Well, one of the things you want to do when cooperating on a large network and you want people to do the right thing is you want to make it hard for people Harpreet: [00:35:59] To [00:36:00] do the wrong thing you want. You want to Jonathan: [00:36:01] Disincentivize criminals by making it hard to be a criminal, right? And so you need a hard problem to solve. Harpreet: [00:36:08] You need to raise the Jonathan: [00:36:09] Cost of doing bad things. And if you're doing good things, that cost actually is worthwhile, right? Hopefully, hopefully, that makes sense. Now the way the best way to explain proof of work, it really is this effort making it hard to both participate, but also to disincentivize criminal activity. The way to explain it is to talk through a transaction, right? So I'm going to be paying Harp a I'm going to say one bitcoin, but everybody knows that that's that's a lot of money. That's right. Now, what is it, fifty five thousand dollars or something? It's fluctuating quite Harpreet: [00:36:46] A lot, but it's a lot of money, right? Let's just say for Jonathan: [00:36:48] Fun, I'm going to pay you one Harpreet: [00:36:50] Bitcoin. Jonathan: [00:36:51] So you and I both need to be participating in this network, this blockchain network, this bitcoin blockchain network alongside, by the way, hundreds of thousands of other people. And so I'm going to now initiate a transaction Harpreet: [00:37:04] Where I say Jonathan Jonathan: [00:37:07] Is going to pay Harpreet one bitcoin. And so I basically create that transaction in my whatever so far I'm using and there's lots and lots of third party software. I can do that, including exchanges and things. So I go ahead and create that transaction. And what happens is it gets broadcasted and there's a sort of a check. First of all, do do I actually have one bitcoin? And fortunately, everybody has the ledger on the computer so they can check, right? But it then goes into a Q and it doesn't immediately get resolved. Harpreet: [00:37:37] What we want is that Jonathan: [00:37:39] A process takes place Harpreet: [00:37:41] That is Jonathan: [00:37:43] That solves a mathematical problem here. I'll tell you about it in a second that if it's correct Harpreet: [00:37:47] And it's and the Jonathan: [00:37:49] Other participants concede or by process of consensus agree that it's the correct transaction, Harpreet: [00:37:54] Then it gets added to the chain of transactions, which are these blocks making up the blockchain [00:38:00] right Jonathan: [00:38:01] Now, when when sort of a pool of transactions are waiting to be processed, Harpreet: [00:38:06] There is a new Jonathan: [00:38:07] Participant on the network called a miner, right? And miners are just another node. Another person, another computer that wants to be part of this network. But they're there, not for transactions, necessarily. Harpreet: [00:38:20] They're there to Jonathan: [00:38:22] Solve this mathematical problem Harpreet: [00:38:24] And get paid for doing it Jonathan: [00:38:26] Right. They want to they want to get a little bit of bitcoin little incentive right now. What happens is, and I think this will be familiar to to data scientists, but I'll just quickly describe it. There's a process in computing called hashing, right? And effectively hashing is you can take any length string, any length of characters and put them through a hashing algorithm Harpreet: [00:38:49] And get a fixed length output. Jonathan: [00:38:51] So it could be the works of Shakespeare, or it could be my name. Whatever goes in one side Harpreet: [00:38:55] Of this algorithm Jonathan: [00:38:57] On the other side comes out and I say, I want the length, the fixed length of the output to be sixty four characters, you know, no matter what, because of sixty four characters, you know, it's almost there's a massive amount of combinations, right? So it's going to be statistically, it's close. The probability is that it's close to unique. Harpreet: [00:39:16] This thing that comes out Jonathan: [00:39:17] Now, what happens is you got these transactions that are queued up. Harpreet: [00:39:21] And what the bitcoin software Jonathan: [00:39:23] Does is it determines that in order to add the block when the queued up transactions are hashed, all right, they should equate to a specific output, a destination output. This hash number and the way that that happens is a miner who is the person who's going to do this hashing. They take Harpreet: [00:39:46] The input, which is Jonathan: [00:39:48] In its collection of all the transactions, and they add a additional character. It's called a nonce right. Harpreet: [00:39:55] It's technical term. Jonathan: [00:39:57] And in this case, you [00:40:00] will say the nonce is one, the character is the number one. Harpreet: [00:40:03] And when the input, which is all Jonathan: [00:40:06] These transactions plus the one are are fed through this hashing algorithm, a test on the other side says, Is this a is this answer the same or less than? In terms of numerics, the bitcoin determined output, you still with me. Ok. And so the first time it does it, no right. Second time, no third time. So now you're getting the nonsense Harpreet: [00:40:32] Going one two, three Jonathan: [00:40:33] Four and you can to do this now, as you can imagine. You got to try. A lot of times, a lot. And depending on the complexity that bitcoin is determined, that output that target number or target has to be, you know, if the computing processing isn't sufficient, it's going to take a long time. But what bitcoin says is you've got to figure it out in 10 minutes. That's the time they give you effectively 10 minutes or less. And to do that, you need a lot of processing power. Now the problems have got harder because more people want to participate, more people want to earn bitcoin for mining. So in the early days, you could probably just do it with your laptop back in 2008, you could definitely do it. Your laptop? Sorry. Two thousand nine. By 2010, you had to have used a server. Harpreet: [00:41:21] By 2011, Jonathan: [00:41:22] You had to have multiple servers, and today you need the power of a country. So some people say, like bitcoin is using the equivalent of the power of Iceland, Harpreet: [00:41:32] You know, to actually figure out these hashing targets. Jonathan: [00:41:36] And so as you can tell by by doing this, there's no, you know, the amount of the cost of actually trying to mess with it. It's too high for a criminal. But the folks that do it right and get the right output, they get some bitcoin and everybody in the network, all the other miners effectively then validate that that Harpreet: [00:41:59] Hashing solution [00:42:00] that Jonathan: [00:42:00] The winning miner came up with is the correct one. I know that's fairly long winded in detail, but you know your audience likes that. I guess that's what that is. The magic. It's it's mathematics. Harpreet: [00:42:14] We love that, yeah, thank you so much for giving us that, that detail. I know the audience is going to definitely love that one there. And I mean, is that part of the reason why bitcoin is worth so much? You mentioned that it takes the power of a small country to to validate these transactions? Well, somebody has to pay that electric Harpreet: [00:42:33] Bill right at the end of the day. Harpreet: [00:42:35] So is this what kind of gives bitcoin its its value? Is that OK? Will it cost money to mind these transactions? Mm hmm. So that kind of gets baked into the price, or am I just making stuff up? Jonathan: [00:42:47] No, you're on to it. It very much was the reason for the early rise in value. So if we go back again, 10, 11 years, you're the definitely. There was a there was a closer alignment between the value of bitcoin and the the amount of energy expended. But as time has passed, that connection has lightened for sure. It's hard today to know the degree to which that's a contributing factor. We do know that if the number was too low, that Harpreet: [00:43:20] Again, you're absolutely right Jonathan: [00:43:22] The you wouldn't get as much. You lose the incentive, right? And so people, the system fails. But it's if it's sufficiently, if it if it Harpreet: [00:43:32] Exceeds, you know, if the Jonathan: [00:43:33] Reward exceeds the input, then you're going to get a lot of participants. What really is driving the price of bitcoin today is just plain old, you know, what's the next person prepared to pay for it? And you know, when you when you look at the current price, it sort of has gone up a lot over just the last few months. There is some very intense macroeconomics at work that Harpreet: [00:43:58] Are sort of over my [00:44:00] pay Jonathan: [00:44:00] Scale, you know, in terms of how all the exchanges are working and how people perceive the marketplace. And then you got the institution investors now in bitcoin as well. There's a lot of different variables that you know now. It's a lot more complicated. It's it's moved from being the topic of computer scientists to being the topic of economists. Right? Is why does it have the value of fifty five thousand? Today, let's say, and you know, in a month from now could jump to seventy thousand. Harpreet: [00:44:32] Or it could drop, you Jonathan: [00:44:34] Know, to thirty thousand. There's a lot of Harpreet: [00:44:36] Mechanisms at work. One of the Jonathan: [00:44:38] Things for sure is that there are a lot of people involved. There's a lot of money involved. So there is a sort of the inertia. The inertia is towards increasing value because there are more people participating, more people want to get in. So they're buying. So there's Harpreet: [00:44:54] There's quite high Jonathan: [00:44:55] Demand. So I hopefully that answered your question, and that is the reason for the price has shifted over time now. It's not as well connected with the power, but certainly the scale is contributing and the amount of transactions are all contributing towards what the value, what the market believes the value should be. Harpreet: [00:45:17] As Nassim Taleb once said, it's easier to macro bullshit than it is to micro bullshit. Jonathan, I know we're running up on on on time. That's just the comment there for the macroeconomics voodoo magic that's causing this price to go up. But yeah, but I appreciate the time you took to come on to the show. We got to get you back to talk about Ethereum at some point in the near future. Harpreet: [00:45:40] So because that Harpreet: [00:45:42] Because I plan on doing that, I'm not going to ask you my standard wrap up question will save that one for next time. But right now, let's just do a couple of quick questions from the random round and. We got the first one coming up here. The Random Question Generator wants to know what's your favorite piece of clothing that you own? Jonathan: [00:46:00] Oh, [00:46:00] I think the right answer should be my Aruba cop, right? Because I'm wearing an Aruba hat right now, people see it on a lot of my videos. I guess that's right. Flip flops. I love my flip flops. Harpreet: [00:46:13] Who are some of your heroes? Jonathan: [00:46:15] My father would be probably my number one. And although this is obviously sensitive and I don't know why big fan of Barack Harpreet: [00:46:22] Obama, I think he's an Jonathan: [00:46:23] Amazing man. You know, I don't I don't care what you think about him as the president, I think is a human being. It's a pretty impressive guy. Harpreet: [00:46:28] Yeah, I got his book sitting right there. Promise land. I've got to read into that for for a couple of months. Jonathan, I'll include all of your contact information right there in the show notes. Thank you again for taking time out your schedule to come on to the show today. Appreciate having you here! Jonathan: [00:46:43] Thanks, Harp. This was a lot of fun. I'm going to be interested to listen back myself to see if I got the answers right? Harpreet: [00:46:50] Awesome, man. Definitely. Thank you.